Everywhere in the world, the trend seems to be toward regional integration—except in Asia. The region does have three potential counterparts to the North American Free Trade Agreement (NAFTA) and the European Union (EU), but two have fallen on hard times and the third seems unlikely to succeed.
According to Webber, a political scientist at INSEAD (the European Institute of Business Administration), these three Asian attempts at regionalism share a number of problems.
The 10-member Association of Southeast Asian Nations (ASEAN) is a Cold War relic built on a foundation of anticommunism. It showed signs of life when it helped persuade Vietnam to withdraw from Cambodia in the early 1990s and planned a regional free-trade area. A much larger assemblage, the Asia-Pacific Economic Cooperation Group (APEC), held a summit meeting in Bogor, Indonesia, in 1994, and this organization also showed great promise, reaching what prominent U.S. economist C. Fred Bergsten called "potentially the most far-reaching trade agreement in history." (APEC embraces the major Pacific Rim countries, including the United States and Russia.) Then came the Asian financial crisis of 1997–98, which exposed the underlying weaknesses of these organizations and spoiled their grand plans.
Out of the crisis came a new, albeit more informal, organization: ASEAN Plus Three (APT). Encompassing Japan, China, and South Korea as well as the ASEAN countries, it spoke of launching an East Asian free-trade zone, moving toward monetary cooperation and possibly a single currency, and other measures. Webber is skeptical that much will come of these ideas.
The big problem is leadership. Experience shows that regional groups must be led either by a benign power (e.g., the United States in NAFTA) or a duo (e.g., France and Germany in the EU). But Japan and China, the APT’s big powers, aren’t likely either to cede power to each other or to cooperate very closely. Indeed, leadership woes helped cripple Asia’s other regional organizations. ASEAN stumbled in part because it was led by Indonesia, which went into crisis after the fall of President Suharto in 1998; APEC failed to implement its ambitious trade liberalization plans because of a clash between its leading duo, Japan and the United States.
The APT enjoys the advantage of a high level of trade among its members—higher than that among the three NAFTA countries. But it shares a handicap with its regional counterparts: It encompasses many diverse countries and even civilizations—Chinese, Japanese, Islamic, and Buddhist. (ASEAN stumbled when it admitted formerly communist countries in the 1990s.) They could be driven together if the United States takes a hostile posture toward Asian regional efforts, but that wouldn’t provide lasting glue, Webber thinks.
He speculates that Asia’s future may lie not in grand schemes of union but in a more modest network of bilateral free-trade agreements between compatible countries, such as Singapore and Australia.